CITY OF GLENDALE CALIFORNIA REPORT TO THE HOUSING

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					FORM CM-38




                   CITY OF GLENDALE CALIFORNIA
                 REPORT TO THE HOUSING AUTHORITY

April 11, 2006

AGENDA ITEM

Agenda Item: Action Item
Proposal to Enter Into a Predevelopment Loan Agreement with Glendale Housing Corporation, a
single-asset assignee of United Cerebral Palsy of Los Angeles and Ventura Counties, in Support
of an Affordable Housing Development for 6206 San Fernando Road
    (1) Motion Authorizing Execution of a Predeve10pment Loan Agreement between Glendale
         Housing Corporation, a single-asset assignee of United Cerebral Palsy of Los Angeles
         and Ventura Counties, and the Housing Authority of the City of Glendale
    (2) Resolution of Appropriation Transferring Funds from Two Closed Out Accounts to
         Another
AUTHORITY ACTION

Public Hearing [        ]     Ordinance [      ]    Consent Calendar [          ]    Action Item [ x]             Report
Only [ ]
Approved for                               calendar


ADMINISTRATIVE ACTION

                                                                                    ~re
Submitted                                                 e~
      Madalyn Blake, Director, Community Development and Housing..                           ~~ ~
Prepared
      Peter Zovak, Housing Development & Preservation Administrator.'
                                                                                              0'2 .                   .-

         Karen Hsu, Housing Project Manager                                                   ~/~~~~~~~:;:t~:=-.


Approved
     James E. Starbird, Executive Director, Housing Authority                                 --+-=----'-"--""--I,.+-.---i--+--~..,.--


Reviewed Howard, City Attorney.............................................................
      Scott                                                                                   f~<.U)
                                                                                              .. ~
                                                                                         /                   I   17
         Bob Franz, Director, Administrative Services....................................          "".       i~
                                                                  Housing Authority Staff Report
                                                                       6206 San Fernando Road
                                                                                 April I I, 2006
                                                                                          Page 2
RECOMMENDATION

The Community Development and Housing Division recommends that the Housing
Authority of the City of Glendale (Housing Authority) enter into a Predevelopment Loan
Agreement with Glendale Housing Corporation, a single-asset assignee of United
Cerebral Palsy of Los Angeles and Ventura Counties, in support of development of a 24-
unit affordable rental housing project for the developmentally disabled at 6206 San
Fernando Road.

SUMMARY

Community Development and Housing staff and United Cerebral Palsy of Los Angeles
and Ventura Counties (UCP) have been in discussion regarding the feasibility of
developing a new affordable rental housing project for the developmentally disabled at
6206 San Fernando Road.

In September 2004, the Housing Authority acquired 6206 San Fernando Road after it was
voluntarily offered for sale on the open market. The parcel was a 27-unit residential
property subject to numerous code enforcement and police actions. The residents of the
property have since been relocated, and the structures were demolished. This site
represents an opportunity to develop an affordable housing project that provides for the
elimination of the existing substandard housing, aides in neighborhood revitalization,
decreases density as well as parking demands over current levels, and provides an
acceptable development transition to the abutting residential neighborhood.

Based upon the goals of the Housing Authority and discussions with staff, UCP is
proposing to develop a 24-unit, two-story affordable rental housing project for very low
income (50% and below Area Median Income) developmentally disabled adults. As
proposed, the project will contain 20 one-bedroom units, and 4 two-bedroom units (one
2-bedroom unit will serve as manger's unit), common outdoor open space, community
room, and at-grade parking lot. The approximate $9.6 million project is to be developed
utilizing a combination of affordable housing funds allocated by BUD under its Section
811 Program, the Housing Authority of the City of Glendale, developer equity,
Multifamily Housing Program (MHP) funding issued by the State of California, and AHP
funding issued by the Federal Home Loan Bank.

In May of2005, the Housing Authority authorized the execution of an Option Agreement
in support for the project's BUD Section 811 application. The Option Agreement is
subject to an award of funds from HUD Section 811 program and the negotiation of
terms and conditions of a Disposition and Development Agreement (DDA) between the
Housing Authority and UCP. In January of 2006, HUD announced its award for Section
811 Program, and the proposed project was chosen as one of the three projects in
California for funding.

In order for the project to submit a competItIve MHP application to the State for
approximately $2 million in funding, and place the project in position to start
                                                                    Housing Authority Staff Report
                                                                         6206 San Fernando Road
                                                                                   April I \, 2006
                                                                                            Page 3
construction to meet Section 811's project timeline, UCP must proceed with architectural
design, entitlements, and other due diligence including survey, and soil studies. MHP
was established by a housing trust fund created in 2002 via authorization of bond
issuance as the outcome of Proposition 46. MHP funds are projected to be depleted after
this year. A predevelopment loan in the amount of $163,500, in conjunction to the
developer's equity contribution, will provide the developer adequate capital to proceed in
its predevelopment process, and maximize its chance at an MHP award.

In the interim, UCP has formed Glendale Housing Corporation as a single-asset assignee
established for the sole purpose of developing the proposed project. The formation of
Glendale Housing Corporation does not and will not change the make up of the project
team involved in the project.

FISCAL IMPACT

The agenda item recommends using the remainder ($95,594) of previously appropriated
fund for this project, and moving the remainders of two closed out accounts (Heritage
Park Project and Dwelling Repair Grant Program) to this project for the $163,500
Predevelopment Loan.

If the project receives MHP funding and successfully negotiates a Disposition and
Development Agreement (DDA) with the Housing Authority, the predevelopment loan
will be incorporated into the total City assistance to the project in accordance to the
DDA, as approved by the Housing Authority. However, the loan will be due and payable
if the developer and the Housing Authority fail to enter into a DDA within 9 months from
the date of the Agreement.

Community Development and Housing staff haS prepared a Predevelopment Loan
Agreement and a Resolution of Appropriation stipulating the following:

Move:
  • $28,906 from Heritage Park Project, account number: 43112-242-840-1223-G63603,
    and
  • $39,000 from Dwelling Repair Grant Program, account number: 43112-242-840-1225

To:
      • San Fernando Project, account number: 43112-242-840-1223-G65602


BACKGROUND

The Community Development and Housing Division have been in discussion with United
Cerebral Palsy of Los Angeles and Ventura Counties regarding the feasibility of
developing a 24-unit affordable rental housing project for the developmentally/physically
disabled at 6206 San Fernando Road. As proposed, the project will contain 20 one-
                                                                    Housing Authority Staff Report
                                                                         6206 San Fernando Road
                                                                                   April II, 2006
                                                                                            Page 4
bedroom units, and 4 two-bedroom units that will include a manger's unit, common
outdoor open space, community room, and at-grade parking lot.

PROJECT DEVELOPMENT TEAM:

United Cerebral Palsy of Los Angeles and Ventura Counties (UCP) - VCP is a
regional non-profit organization with experience in providing social services and
affordable housing to clients with physical/developmental disabilities. VCP is the largest
developer of affordable, accessible homes for adults with developmental disabilities in
Southern California. VCP and it single-asset assignees own and operate 9 HUD Section
811 independent living projects in the cities of Santa Monica, Los Angeles, Pasadena,
Stanton, Culver City, North Hollywood, Torrance, Carpinteria, and Goleta. Currently,
VCP has a similar HUD Section 811 project in construction on San Fernando Road in the
City of Burbank.

Glendale Housing Corporation -- VCP has caused Glendale Housing Corporation be
formed as a single-asset assignee established for the sole purpose of developing the
proposed project while limiting VCP's liability. The formation of Glendale Housing
Corporation does not and will not change the make up of the project team involved in the
project.

Nancy Lewis and Associates - Nancy Lewis is the Principal Financial Consultant ofthis
project and coordinates the submittal of the HOO Section 811 application. Ms. Lewis has
assisted development of over 1,500 units of affordable housing in more than 50 projects
since 1984. She has also provided training in affordable housing development workshops
sponsored by the Southern California Association for Non-Profit Housing, County of
Orange, County of Los Angeles, City of Santa Monica, and Enterprise Foundation.

ArquiTaller Incorporated -ArquiTaller is the architectural firm for the proposal and is
a local Glendale firm with over 15 years of experience. Efrain Olivares is the President
of ArquiTaller Inc. and is the Principal Architect for this project. He is a Glendale
resident and an active community member having previously served on the Planning
Commission and is now a member of the Community Block Grant Advisory
Commission. Mr. Olivares has designed a number of HOO 811 projects for VCP and is
the person responsible for the award-winning Good House/Ivy Glen project, the Housing
Authority's first HUD Section 811 project.

DESCRIPTION OF PROJECT SITE:

The property address of the site that is subject to this proposal is 6206 San Fernando
Road, located on the east side of San Fernando between Newby Street and Willard
Avenue. Prior to Housing Authority acquisition, the 27-unit residential property was
listed for sale on the open market. The project site is rectangular and encompasses the
entire block fronting San Fernando from Newby to Willard measuring approximately
211' x 120' or approximately 25,700 square feet (.58 acres).
                                                                      Housing Authority Staff Report
                                                                           6206 San Fernando Road
                                                                                     April 11, 2006
                                                                                              Page 5
The project site is currently zoned Industrial Mixed Use-Residential (IMU-R) and allows
for development of 20 units on the site at R-1250 zoning standard. At 24 units, the
proposed project will seek a 20% density bonus, which is permissible for affordable
housing development.

The properties surrounding the proposed site consist of a mix of industrial and light
manufacturing uses as well as housing, Primarily industrial and light manufacturing uses
are located south, west, and north of the subject site. These uses do not abut the proposed
project as the project site consists of the entire block and is separated by Newby Street,
San Fernando Road, and Willard Avenue. Immediately to the east of the site, separated
by an alley, are single family residential uses.

During the Housing Authority's negotiations to acquire the site, the residents of the
neighborhood area were very vocal, but supportive of the Housing Authority'S action.
The residents expressed a desire to be involved in the eventual development and design
of any new project for this location. On March 24, 2005, a neighborhood meeting was
hosted by CDR staff. Staff explained the Housing Authority's acquisition of the site and
the Developer and architect presented the proposed use, its targeted population, and
conceptual design of the proposed affordable housing project to the public.

One hundred and five invitations were mailed out to the neighborhood, and
approximately twenty residents showed up for the meeting. Residents responded
positively toward the eventual demolition of the current building and the affordable
housing proposal. Several residents reminded staff of concerns regarding the potential
impact on parking and traffic, however given the proposed tenure of clients for this
proj ect the proposed use would generate less impact than a commercial or market rate
apartments. Some minor comments were also received about the proposed design of the
project.

DESCRIPTION OF PROPOSED PROJECT AND PROJECT FINANCING:

The proposed project will contain 20 one-bedroom units, and 4 two-bedroom units, a
community room, a courtyard, laundry facility, and on-grade parking. Qualified project
residents with either physical or developmental disabilities are expected to be one and/or
two person households capable of living independently. Supportive services either
provided or coordinated by the developer, will also be available to the residents.

The proposed building is designed to reflect the goals of the recently adopted San
Fernando zoning ordinance. The design attempts to build and improve upon the existing
industrial uses and the expected future commercial developments along San Fernando by
incorporating stream line shapes and colors. In an effort to maintain sensitivity to the
residential uses east of the site, the building design contains a series of various massing,
relieves, and setbacks to break down visual scale. The project will be served by a 14 car
"at-grade" parking lot that will be located along the eastern edge of the property. This
concept is designed to take advantage of the existing alleyway that runs from Newby
                                                                    Housing Authority Staff Report
                                                                         6206 San Fernando Road
                                                                                   April II, 2006
                                                                                            Page 6
Street to Willard Avenue and to create a greater distance of separation between the
proposed units and adjacent residential uses.

Each of the residential units will contain an open living room and dining area, ADA
handicap accessible kitchen, and oversized bathroom and shower areas to facilitate easy
movement for the physically disabled. Each unit will be provided with an emergency call
system that is monitored by the onsite property manager and the project will be served by
a central elevator. All open spaces for the project will be situated on grade to minimize
the need for ramps and slopes.

The approximate $9.6 million project is to be developed utilizing a combination of
affordable housing funds from HUD's Section 811 Program in the awarded amount of
approximately $3.1 million, developer equity commitment of' $250,000, Housing
Authority funds in the estimated amount of $4.1 million, MHP funding issued by the'
State of California in the amount of approximately $2 million, and approximately
$100,000 in AHP funding issued by the Federal Home Loan Bank.

                                    Sources and Uses

                                            Total    Per Unit
           HUD                         $3,147,792    $131,158
           MHP                         $2,042,026     $85,084
           AHP                           $100,000      $4,167
           Developer Equity              $250,000     $10,417
           Authority (land)            $2,700,000    $112,500
           Authority (relocation)       $700,000      $29,167
           Authority (gap)              $755,709      $31,488


           TOTAL                       $9,695,527      $403,980


Previously, the Housing Authority authorized an Option Agreement to be entered into
between the Housing Authority and UCP in support of its application for HUD's Section
811 Program. The project has since successfully obtained an award, and is one of only
three projects awarded in California.

This $9.6 million project budget was prepared in May 2005 for HUD's Section 811
submittal. As the project progresses through design and entitlement process, the project
budget will be updated. A revised budget will be incorporated in the eventual DDA.

In order for the project to proceed and submit a competitive MHP application to the State,
as well as getting the project in position to start construction to meet Section 811's
project timeline, the developer must move on with architectural design, entitlements, and
other due diligence. MHP is funded by a housing trust fund created in 2002 via
authorization of bond issuance as the outcome of Proposition 46, and is projected to be
                                                                   Housing Authority Staff Report
                                                                        6206 San Fernando Road
                                                                                  April II, 2006
                                                                                           Page 7
depleted after this year. MHP is a necessary source to make this project financially
feasible.


SUMMARY OF           KEY     TERMS       OF   THE     PREDEVELOPMENT                  LOAN
AGREEMENT:

Key tenns ofthe Predevelopment Loan Agreement are:

   •   Glendale Housing Corporation is a single-asset assignee of UCP fonned by UCP
       for the purpose of developing the proposed project.
   •   UCP shall assign all of its rights in and to the project, including the Option
       Agreement and HUD' s Section' 811 commitment to Glendale Housing
       Corporation.
   •   The amount for the predevelopment loan is $163,500, at 0% interest.
   •   The loan shall be used exclusively to pay the following:
           o $60,000 for Conditional use, variance and parking reduction application
               fee,
           o $65,000 for architectural design and Design Review Board fee,
           o $7,000 for site surveys,
           o $8,800 for soils engineering,
           o $15,200 for preliminary construction documents, and
           o $7,500 for MHP consultant and application fees
       From time to time, the developer may request amendment to the predevelopment
       budget, subject to the approval of the Housing Authority's Executive Director
   •   The loan will be incorporated in the total City assistance to the project in
       accordance to the DDA, as approved by the Housing Authority.
   •   The loan is due and payable if the developer and the Housing Authority fail to
       enter into a Disposition and Development Agreement (DDA) within 9 months
       from the date of the Agreement.
   •   As security for repayment of the predevelopment loan, developer shall execute
       and deliver to the Housing Authority an Assignment of Agreements, Plans,
       Specifications and Entitlements, Contracts and Plans, as an exhibit to the
       Predevelopment Loan Agreement.


CONCLUSION

The Community Development and Housing Division have been in discussions with
United Cerebral Palsy of Los Angeles and Ventura Counties regarding the feasibility of
developing a 24-unit affordable rental housing project for the developmentally/physically
disabled at 6206 San Fernando Road. The approximate $9.6 million project is to be
developed utilizing a combination of affordable housing funds allocated by HUD under
its Section 811 Program, the Housing Authority of the City of Glendale, developer
equity, MHP funding issued by the State of California, and AHP funding issued by the
Federal Horne Loan Bank.
                                                                     Housing Authority Staff Report
                                                                          6206 San Fernando Road
                                                                                    April II, 2006
                                                                                             Page 8


UCP has successfully obtained award from HUD's Section 811 Program, and will submit
application to the State of California for MHP funds. In order for the developer to be
competitive for this funding source, as well as meeting Section 811's timeline of
construction commencement, the developer must proceed with architectural design,
entitlement, and other due diligence items including survey and soil studies.

For the purpose of this project, Glendale Housing Corporation was formed by UCP as a
single-asset assignee to develop the project. The formation of Glendale Housing
Corporation does not and will not change the make up of the project team involved in the
project. Consistent with the purpose of Glendale Housing Corporation, UCP shall assign
all of its rights in and to the project, including the previously executed Option Agreement
between UCP and the Housing Authority, and HUD's Section 811 commitment to
Glendale Housing Corporation for project continuity.

This agenda item recommends issuing a predevelopment loan to Glendale Housing
Corporation, the single-asset assignee of UCP, in the amount of $163,500, to be used in
conjunction of developer's equity, to pay for predevelopment costs in accordance to the
Predevelopment Loan Agreement.

Community Development and Housing staff has prepared a Predevelopment Loan
Agreement and a Resolution of Appropriation to transfer $163,500 of budgeted funds to
this proj~ct. The predevelopment loan will be incorporated into the total Housing
Authority assistance to the project in accordance to the eventual Disposition and
Development Agreement (DDA), as approved by the Housing Authority. However, if
the developer and the Housing Authority fail to enter into a DDA within 9 months from
the date of the Agreement, the loan will be due and payable.


EXHIBITS

1. Plat Map
2. Predevelopment Loan Agreement
3. Resolution of Appropriation
                                            MOTION
        Moved               by              Housing               Authority            Member

                                                  seconded       by   Housing     Authority

Member                                                    that the Executive Director,

or his designee, is hereby authorized to execute a Predevelopment

Loan Agreement between the Housing Authority and Glendale Housing

Corporation, a single-asset assignee of the United Cerebral Palsy

of Los Angeles and Ventura Counties,                        In support of an affordable

housing         development          for      6206       San     Fernando     Road.        The

Predevelopment Loan Agreement shall be in substantially the form

attached to the Report to the Housing Authority dated April 11,

2006.



Vote as follows:

        Ayes:

        Noes:

        Absent:

        Abstain:




                                                                      CHI   SSISTANT CITY ATTORNEY
                                                                            ___
                                                                      DATED '1/6/ob
                                                                                  ~_~r      ..


J:\FILES\DOCFILES\FACTFIND\HA uCP Predevelopment Loan Agmt.doc                             B 1
                                            RESOLUTION NO..                                      _

                RESOLUTION OF THE HOUSING AUTHORITY OF THE CITY OF GLENDALE
                                MAKING AN APPROPRIATION

  BE IT RESOLVED BY THE HOUSING AUTHORITY OF THE CITY OF GLENDALE:

SECTION 1: That the sum of $67,906 be and it is hereby appropriated and transferred from the following
accounts to the following accounts:
 Account    Fund Org          Program   Project   Description                                                                           From        To
  43112
            --
             242 840            1223    063603    Low & Mod Housing Fund, Heritage Park                                                 $ 28,906
  43112       242       840     1225              Low & Mod Housing Fund, Dwelling Repair Oral                                          $ 39,000
  43112       242       840     1223    065602    Low & Mod Housing Fund, San Fernando Project                                                     $ 67,906

To appropriate funding for the San Fernando Project.

SECTION 2: The Secretary shall certify to the adoption of this Resolution.

        Adopted this               day of                , 2006.



                                                                             Chairman
                                                                    ..,tr't""'.--,,,,,~ ._._~,. __.-- .•.•..•.- - _._~-.,,-..........
ATTEST:                                                      ..... ~.   .,


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            Secretary                                                          n~~VO~
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                                                                             ~--
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) SS
CITY OF GLENDALE   )
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                                                                   ....,j5""" ·.Gi~     ..
    I, Ardashes Kassakhian, Secretary of the Housing Authority of the City of Glendale, certify that the
foregoing Resolution            was adopted by the Council of the City of Glendale, California, at a
regular meeting held on the          day of              , 2006 and that the same was adopted by the
following vote:

Ayes:

Noes:

Absent:

                                                                        City Clerk




                                                                                                                                             B 2
 EXHIBIT 1

  Plat Map

(See Attached)
Assessor Map                                                                                                          Page 1 of 1


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                                                                     County of Los Angeles: Hick AUEfbaGh, Assessor
                                                                                                                              I
            5623


                       2005




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http://assessonnap.co.la.ca.lls/mapping/gifimage.asp?val=5623038.00                                                   3/28/2006
         EXHIBIT 2

Predevelopment Loan Agreement

        (See Attached)
                              PREDEVELOPMENT LOAN AGREEMENT
                                   6206 San Fernando Road

      This Predevelopment Loan Agreement (this "Agreement") is entered into as of
_ _ _ _ _ _, 2006 by and between the Housing Authority of the City of Glendale
("Authority") and Glendale Housing Corporation, a California corporation ("Developer").

RECITALS

A.    The Authority owns that certain real property consisting of approximately 27,750
square feet, located in the City of Glendale ("City"), described in the legal description
attached to this Agreement as Exhibit "A" (the "Property").

B.     The Authority has entered into an Option Agreement with United Cerebral
Palsy/Spastic Children's Foundation of Los Angeles and Ventura Counties, a California
nonprofit public benefit corporation ("UCP"), granting to UCP an option to purchase the
Property for the purpose of developing thereon a 24-unit, two-story affordable housing
project for very low income developmentally and physically disabled adults (the
"Project").

C.    The Project is expected to be financed with a combination of developer equity
and loans, grants and/or capital advances under a variety of affordable housing
programs, including but not limited to funds under the following programs: (1) U.S.
Department of Housing and Urban Development ("HUD") Section 811 Supportive
Housing for Persons with Disabilities Program (the "Section 811 Program"); (2) the City
of Glendale affordable housing programs; (3) the State of California MHP Program; (4)
the Federal Home Loan Bank's Affordable Housing Program ("AHP").

D.       UCP has received a commitment from HUD for Section 811 Program funding.

E.    UCP has caused Developer to be formed to develop the Project, and has
assigned all of its rights in and to the Project, including the Option Agreement and the
HUD funding commitment, to Developer.

F.    UCP has expended its funds on certain predevelopment activities necessary and
appropriate for the Project.

G.     Developer wishes to borrow funds from the Authority, and Authority wishes to
lend funds to Developer, to pay for additional predevelopment activities, in accordance
with the terms of this Agreement.

NOW, THEREFORE, the parties to this Agreement agree as follows:



                                            -1-
Gln\ucp\predevelopment loan
3-15-06
       1.    The Housing Authority hereby agrees to advance to Developer funds not to
exceed the sum of $163,500, with no interest (the "Predevelopment Loan"), for the
purpose of assisting Developer to pay predevelopment costs incurred in connection with
the proposed Project (the "predevelopment Costs").

       2.      The Predevelopment Loan shall be evidenced by a Promissory Note,
sUbstantially in the form attached to this Agreement as Exhibit "B" which is incorporated
herein by this reference. As security for repayment of the Predevelopment Loan,
Developer shall execute and deliver to the Housing Authority an Assignment of
Agreements, Plans, Specifications and Entitlements, Contracts and Plans (the
"Assignment"), substantially in the form attached to this Agreement as Exhibit "C", which is
incorporated herein by this reference. Developer shall execute and deliver the Promissory
Note and the Assignment to the Housing Authority prior to any disbursement of
Predevelopment Loan funds.

      3.      The parties hereby acknowledge that UCP has expended the sum of
$55,233 for the following predevelopment costs:

                  a.          Preliminary renderings/drawings;
                  b.          HUD Section 811 application fees and costs;
                  c.          HUD Section 811 consultant fees;
                  d.          Legal fees; and
                  e.          Corporate set-up.

        4.  The Predevelopment Loan shall be used by Developer exclusively to pay the
following additional Predevelopment Costs (which shall be referred to as the
"Predevelopment Budget"):

                  a.          $60,000 for Conditional use, variance and parking reduction
                              application fees;
                  b.          $65,000 for Architectural design and Design Review Board fee;
                  c.          $7,000 for Site surveys;
                  d.          $8,800 for Soils engineering;
                  e.          $15,200 for Preliminary construction documents; and
                  f.          $7,500 for MHP consultant and application fees.

From time to time, Developer may request amendments to the Predevelopment Budget,
which shall be subject to the reasonable written approval of the Housing Authority's
Executive Director.

       5.    Disbursements shall be made in accordance with the Housing Authority's
loan disbursement procedures upon the submission of one or more loan disbursement
requests supported by invoices or similar documentation reasonably acceptable to the
Housing Authority Executive Director.
                                                   -2-
Gln\ucp\predevelopmen1 loan
3-15-06
        6.     The principal amount of the Predevelopment Loan, without interest, shall be
due and payable in the event Developer fails to satisfy the performance requirements set
forth in Section 7 of this Agreement, or the parties fail to enter into a Disposition and
Development Agreement for the conveyance of the Property to Developer and the
financing, construction and operation of the Project ("DDA") within nine (9) months from
the date of this Agreement. Upon execution of a DDA, the Predevelopment Loan shall be
incorporated into and shall be due and payable in accordance with the terms and
conditions of any acquisition, construction or permanent loan provided for in the DDA.

       7.    Developer shall initiate the City entitlement process by applying for Design
Review Board and Conditional Use Permit approval and Environmental Review not later
than 90 days after the date that this Agreement is approved by the Housing Authority.

       8.     Developer, for itself and its successors and assigns, agrees that there
shall be no discrimination against or segregation of" any person, or group of persons on
account of race, color, creed, religion, national origin, ancestry, age, physical handicap,
medical condition, marital status, sex or sexual orientation in connection with the use of
the Predevelopment Loan funds or in any other aspect of the proposed Project.

         9.     a. To the maximum extent permitted by law, Developer agrees to and
shall defend, indemnify and hold harmless Housing Authority, the City of Glendale and
their respective officers, employees, contractors and agents from and against all claims,
liability, loss, damage, costs or expenses (including reasonable attorneys' fees and
court costs) arising from or as a result of the death of any person or any accident, injury,
loss or damage whatsoever caused to any person or the property of any person
resulting or arising from or in any way connected with the activities of Developer, and
any loss or damage to Housing Authority resulting from any inaccuracy in or breach of
any representation or warranty of the Developer, or resulting from any breach or default
by the Developer, under this Agreement. The foregoing indemnity shall continue until
the repayment in full of the Predevelopment Loan.

                b. Prior to disbursement of the Predevelopment Loan, Developer shall
procure and shall maintain in force, at no cost to Housing Authority, a commercial
general liability insurance, insuring Housing Authority and Developer again~t any liability
arising out of the use, occupancy, or maintenance of any property of the Developer,
including without limitation personal injury and death. Such insurance shall be in an
amount not less than $1,000,000 per occurrence, combined single limit. This policy
shall include broad form contractual liability and indemnity coverage which shall insure
performance by Developer of the indemnity and defense provisions set forth in this
Agreement. The limits of said insurance shall not, however, be construed to limit the
liability of Developer under this Agreement.



                                           -3-
Gln\ucp\predevelopment loan
3-15-06        .
               c.     The insurance required pursuant to this Agreement shall: (1) name
the Housing Authority of the City of Glendale, the City of Glendale and their officers,
employees, contractors and agents as additional insureds as their interests appear; (2)
provide that the coverage thereof is primary and non-contributory coverage with respect
to all additional insureds; and (3) contain a Standard Cross Liability endorsement
providing that the insurance applies separately to each insured against whom a claim is
filed, and that the policy covers claims or suits by one insured against the other.

               d.     Prior to the disbursement of the Predevelopment Loan, Developer
shall notify Housing Authority in writing of the name of Developer's insurer and deliver to
Housing Authority certificates of insurance evidencing the existence and amount of such
insurance, and showing Housing Authority (and the other parties designated in
subdivision (c), above) as an additional insured on all policies; provided that in the event
Developer fails to procure and maintain such insurance, Housing Authority may (but
shall not be required to) procure same at Developer's expense. No policy shall be
cancelable or subject to reduction of coverage or other modification except after thirty
(30) days prior written notice to Housing Authority by the insurer (or such shorter period
of time for such notice as may be the commercial custom and practice in such policies).
Developer shall, within twenty (20) days prior to the expiration of such policies, furnish
Housing Authority with renewals or binders, or Housing Authority may order such
insurance and charge the cost to Developer, which amount shall be payable by
Developer upon demand. Housing Authority shall use good faith efforts to provide
notice to Developer prior to any expenditure by Housing Authority to order such
insurance. Developer shall have the right to provide such insurance coverage pursuant
to blanket policies obtained by Developer provided that such blanket policies expressly
afford coverage to the Property and to Developer and Housing Authority as required by
this Agreement.

       10.    Developer makes the following representations and warranties for the
benefit of Authority, and on which Authority may rely:

             a.     Developer is a corporation, duly organized and existing under the
laws of the State of California, with the power to enter into the transactions on its part
contemplated by this Agreement, the Promissory Note and the Assignment (the
"Developer Documents") and to carry out its obligations under the Developer
Documents. By proper action, the Developer has authorized the execution, delivery and
due performance of each of the Developer Documents.

              b.     Neither the execution and delivery by the Developer of any of the
Developer Documents, nor the Developer's compliance with the terms, provisions or
conditions on the part of the Developer in the Developer Documents, to the knowledge
of Developer, conflicts in any material respect with or results in a material breach of any
of the terms, conditions or provisions of any constitutional or statutory requirements, or
of any agreement, instrument, judgment, order or decree to which the Developer is now
                                            -4-
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3-15-06
a party or by which it is bound or constitutes a material default by the Developer under
any of the foregoing.

              c.     No litigation or administrative action or any nature has been served
upon Developer and is now pending (i) seeking to restrain or enjoin the execution and
delivery of the Developer Documents, or in any manner questioning the proceedings or
authority relating thereto or otherwise affecting the validity of any of the Developer
Documents, or (ii) as to the existence or authority of Developer or its members, and, to
the knowledge of Developer, none of the foregoing is threatened.

       11.    a. The failure or delay by either party to perform any term or provision of
this Agreement constitutes a default under this Agreement. In addition, the following
shall constitute a default under this Agreement (which shall be for the benefit of the
Authority):

                    (1)   Developer and Housing Authority shall fail to enter into a
DDA within nine (9) months after the date of this Agreement; or

                              (2)   An act of bankruptcy shall occur with respect to Developer;
or

                              (3)   Developer shall be dissolved, liquidated or cease doing
business; or

                     (4)   Any representation or warranty made by Developer herein,
or in any document or certificate delivered to the Authority in connection herewith or
pursuant hereto shall prove at any time to be, in any material respect, incorrect or
misleading as of the date made; or

                      (5)    A material adverse change occurs in the Developer's
financial condition, which materially impairs Developer's ability to perform the
obligations set forth in the Developer Documents; or

                      (6)    A judgment or judgments are entered against the Developer,
or any governmental authority takes action, in each case materially adversely affecting
Developer's ability to perform pursuant to the Developer Documents.

              b.    The party in default must immediately commence to cure, correct or
remedy such failure or delay (if such cure, correction or failure is curable), and shall
complete any such cure, correction or remedy with reasonable diligence, and during any
period of curing shall not be in default, so long as it endeavors to complete such cure,
correction or remedy with reasonable diligence, and provided such cure, correction or
remedy is completed within the applicable time period set forth herein after receipt of


                                                  -5-
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written notice (or such additional time as may be deemed by the Housing Authority to be
reasonably necessary to correct the default).

               c. The injured party shall give written notice of default to the party in
default, specifying the default complained of by the injured party. Failure or delay in
giving such notice shall not constitute a waiver of any default, nor shall it change the
time of default. Except as otherwise expressly provided in this Agreement, any failures
or delays by either party in asserting any of its rights and remedies as to any default
shall not operate as a waiver of any default or of any such rights or remedies. Delays
by either party in asserting any of its rights and remedies shall not deprive either party
of its right to institute and maintain any actions or proceedings which it may deem
necessary to protect, assert or enforce any such rights or remedies.

              d.    If a monetary event of default occurs, prior to exercIsing any
remedies hereunder, the injured party shall give the party in default written notice of
such default. The party in default shall have a period of ten (10) calendar days after
such notice is received or deemed received within which to cure the default prior to
exercise of remedies by the injured party.

                e.     If a non-monetary event of default occurs, prior to exercising any
remedies hereunder, the injured party shall give the party in default notice of such
default. If the default is reasonably capable of being cured within thirty (30) calendar
days after such notice is received or deemed received, the party in default shall have
such period to effect a cure prior to exercise of remedies by the injured party. If the
default is such that it is not reasonably capable of being cured within thirty (30) days,
and the party in default (i) initiates corrective action within that period, and (ii) diligently,
continually, and in good faith works to effect a cure as soon as possible, then the party
in default shall have such additional time as is reasonably necessary to cure the default
prior to exercise of any remedies by the injured party. In no event shall the Housing
Authority be precluded from exercising remedies if its security becomes or is about to
become materially jeopardized by any failure to cure a default or the default is not cured
within thirty (30) days after the first notice of default is given (or within ninety (90) days
after the first notice of default is given, in the case of a default that is not reasonably
capable of being cured within thirty (30) days).

              f. Any notice of default that is transmitted by electronic facsimile
transmission followed by delivery of a "hard" copy, shall be deemed delivered upon its
transmission; any notice of default that is personally delivered (including by means of
professional messenger service, courier service such as United Parcel Service or
Federal Express, or by U.S. Postal Service), shall be deemed received on the
documented date of. receipt by Developer; and any notice of default that is sent by
registered or certified mail, postage prepaid, return receipt required shall be deemed
received on the date of receipt thereof.


                                              -6-
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       12.     Subject to the notice and cure provIsions of this Agreement, if either
Developer or Housing Authority defaults under any of the provisions of this Agreement,
the non-defaulting party shall serve written notice of such default upon the defaulting
party. If the default is not timely cured by the defaulting party within the time provided
herein, the non-defaulting party at its option may exercise any remedy available under
law or equity.

        13.   The rights and remedies of the parties are cumulative, and the exercise by
either party of one or more of such rights or remedies shall not preclude the exercise by
it, at the same time or different times, of any other rights or remedies for the same
default or any other default by the other party.

        14.    In addition to any other rights or remedies, either party may institute legal
action to cure, correct or remedy any default, to recover damages for any default, or to
obtain any other remedy consistent with the purpose of this Agreement. Such legal
actions must be instituted in the Superior Court of the County of Los Angeles, State of
California, in an appropriate Municipal Court in that county, or in the United States
District Court for the Central District of California.

       15.  The laws of the State of California shall govern the interpretation and
enforcement of this Agreement.

        16.   Should legal action be brought by either party for breach of this
Agreement or to enforce any provision, the prevailing party in such action shall be
entitled to reasonable attorneys' fees,court costs and other litigation expenses
including, without limitation, expenses incurred for preparation and discovery, and on
appeal. The entitlement to recover such reasonable fees, costs and expenses shall
accrue upon the commencement of the action regardless of whether the action is
prosecuted to final judgment.

        17.    All notices required to be delivered under this Agreement to the other
party must be in writing and shall be effective (i) when personally delivered by the
other party or messenger or courier thereof; (ii) three (3) business days after
deposit in the United States mail, registered or certified; (iii) twenty-four (24) hours
after deposit before the daily deadline time with a reputable overnight courier or
service; or (iv) upon receipt of a telecopy or fax transmission, provided a hard copy
of such transmission shall be thereafter delivered in one of the methods described
in the foregoing (i) through (iii); in each case postage fully prepaid and addressed to
the respective parties as set forth below or to such other address and to such other
persons as the parties may hereafter designate by written notice to the other
parties hereto:



                                            -7-
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         To Authority:              Housing Authority of the City of Glendale
                                    141 North Glendale Avenue
                                    Glendale, CA 91206
                                    Attn: Executive Director
                                    Fax: (818) 482-9236

         Copy to:                   Glenn F. Wasserman, Esq.
                                    Kane Ballmer & Berkman
                                    515 S. Figueroa Street, Suite 1850
                                    Los Angeles, CA 90071
                                    Fax: (213) 625-0931


         To Developer:              Glendale Housing Corporation
                                    c/o United Cerebral Palsy/Spastic Children's
                                    Foundation of Los Angeles and Ventura Counties
                                    6430 Independence Avenue
                                    Woodland Hills, CA 91367
                                    Attn: Ron Cohen
                                    Fax: (818) 909-9106

         Copy to:                   Alan D. Ross, Esq.
                                    Alan D. Ross Law Corporation
                                    17530 Ventura Blvd., Suite 205
                                    Encino, CA 91316
                                    Fax: (818) 501-8960


        18.    a. Performance by either party hereunder shall not be deemed to be in
default where delays or defaults are due to war, insurrection, strikes, lock-outs, riots,
floods, earthquakes, fires, casualties, acts of God, acts of the public enemy, epidemics,
quarantine restrictions. freight embargoes, lack of transportation, governmental
restrictions or priority, litigation, unusually severe weather, inability to secure necessary
labor, material or tools, delays of any contractor, sub-contractor or supplier, acts of the
other party, acts or failure to act of the City of Glendale or any other public or
governmental Housing Authority or entity (except that acts or failure to act of Housing
Authority shall not excuse performance of Housing Authority), or any causes beyond the
control or without the fault of the party claiming an extension of time to perform.

               b. An extension of time for any such cause (a "Force Majeure Delay")
shall be for the period of the enforced delay and shall commence to run from the time of
the commencement of the cause, if notice by the party claiming such extension is sent

                                            -8-
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to the other party within thirty (30) days of knowledge of the commencement of the
cause. Notwithstanding the foregoing, none of the foregoing events shall constitute a
Force Majeure Delay unless and until the party claiming such delay and interference
delivers to the other party written notice describing the event, its cause, when and how
such party obtained knowledge, the date and the event commenced, and the estimated
delay resulting therefrom. Any party claiming a Force Majeure Delay shall deliver such
written notice within thirty (30) days after it obtains actual knowledge of the event. Times
of performance under this Agreement may also be extended in writing by the Housing
Authority and the Developer.

         19.   a. No member, official, or employee of Housing Authority shall have any
personal interest, direct or indirect, in this Agreement, nor shall any such member,
official, or employee participate in any decision relating to the Agreement which affects
his personal interests or the interests of any corporation, partnership, or association in
which he is, directly or indirectly, interested.

               b. Developer warrants that it has not paid or given, and will not payor
give, any third person any money or other consideration for obtaining this Agreement.

      20.    No member, official, agent, legal counsel or employee of Housing
Authority shall be personally liable to Developer, or any successor in interest in the
event of any default or breach by Housing Authority or for any amount which may
become due to Developer or successor or on any obligation under the terms of this
Agreement.

       21.    Except as otherwise expressly provided in this Agreement, approvals
required of Housing Authority or Developer in this Agreement, including the attachments
hereto, shall not be unreasonably withheld or delayed.

       22.    a. The language in all parts of this Agreement shall in all cases be
construed simply, as a whole and in accordance with its fair meaning and not strictly for
or against any party. The parties hereto acknowledge and agree that this Agreement
has been prepared jointly by the parties and has been the subject of arm's length and
careful negotiation over a considerable period of time, that each party has been given
the opportunity to independently review this Agreement with legal counsel, and that
each party has the requisite experience and sophistication to understand, interpret, and
agree to the particular language of the provisions hereof. Accordingly, in the event of
an ambiguity in or dispute regarding the interpretation of this Agreement, this
Agreement shall not be interpreted or construed against the party preparing it, and
instead other rules of interpretation and construction shall be utilized.

             b.    If any term or provision of this Agreement, the deletion of which
would not adversely affect the receipt of any material benefit by any party hereunder,
shall be held by a court of competent jurisdiction to be invalid or unenforceable, the
                                            -9-
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remainder of this Agreement shall not be affected thereby and each other term and
provision of this Agreement shall be valid and enforceable to the fullest extent permitted
by law. It is the intention of the parties hereto that in lieu of each clause or provision of
this Agreement that is illegal, invalid, or unenforceable, there be added as a part of this
Agreement an enforceable clause or provision as similar in terms to such illegal, invalid,
or unenforceable clause or provision as may be possible.

              c.     The captions of the articles, sections, and subsections herein are
inserted solely for convenience and under no circumstances are they or any of them to
be treated or construed as part of this instrument.

              d.      References in this instrument to this "Agreement" mean, refer to
and include this instrument as well as any riders, exhibits, addenda and attachments
hereto (which are hereby incorporated herein by this reference) or other documents
expressly incorporated by reference in this instrument. Any references to any covenant,
condition, obligation, and/or undertaking "herein," "hereunder," or "pursuant hereto" (or
language of like import) shall mean, refer to, and include the covenants, obligations. and
undertakings existing pursuant to this instrument and any riders, exhibits, addenda, and
attachments or other documents affixed to or expressly incorporated by reference in this
instrument.

              e.    As used in this Agreement, and as the context may require, the
singular includes the plural and vice versa, and the masculine gender includes the
feminine and vice versa.

      23.   Time is of the essence with respect to the performance of each of the
covenants and agreements contained in this Agreement.

       24.    Nothing contained in this Agreement shall be deemed or construed to
create a partnership, joint venture, or any other relationship between the parties hereto
other than lender and Developer according to the provisions contained herein, or cause
Housing Authority to be responsible in any way for the debts or obligations of
Developer, or any other party.

        25.    Developer agrees to comply with all the requirements now in force, or
which may hereafter be in force, of all municipal, county, state and federal authorities,
pertaining to all the activities of the Developer. The judgment of any court of competent
jurisdiction, or the admission of Developer in any action or proceeding against
Developer, whether Housing Authority be a party thereto or not, that Developer has
violated any such legal requirements shall be conclusive of that fact as between
Housing Authority and Developer.




                                           -10-
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       26. This Agreement, and the terms, provIsions, promises, covenants and
conditions hereof, shall be binding upon and shall inure to the benefit of the parties
hereto and their respective heirs, legal representatives, successors and assigns.

        27.   The parties to this Agreement acknowledge and agree that the provisions
of this Agreement are for the sole benefit of Housing Authority and Developer, and not
for the benefit, directly or indirectly, of any other person or entity, except as otherwise
expressly provided herein.

       28.   Developer hereby represents that the persons executing this Agreement
on behalf of Developer have full Housing Authority to do so and to bind Developer to
perform pursuant to the terms and conditions of this Agreement.

       29.    Each of the attachments and exhibits attached hereto is incorporated
herein by this reference.

       30.  This Agreement may be executed by each party on a separate signature
page, and when the executed signature pages are combined, shall constitute one single
instrument.

       31.   a.    This Agreement is executed in five (5) duplicate originals, each of
which is deemed to be an original.

              b.   This Agreement integrates all of the terms and conditions
mentioned herein or incidental hereto, and supersedes all negotiations or previous
agreements between the parties with respect to all or any part of the subject matter
hereof. The Housing Authority and Developer understand that oral agreements or
commitments to loan money, extend credit or to forbear from enforcing repayment of a
debt including promises to extend or renew such debt are not enforceable. To protect
Housing Authority and Developer from misunderstanding or disappointment, any
agreements the Housing Authority and the Developer reach covering such matters are
contained in this Agreement, which is the complete and exclusive statement of the
agreement between the Developer and the Housing Authority, except as the Developer
and the Housing Authority may later agree in writing to modify this Agreement.

            c. All waivers of the provisions of this Agreement must be in writing and
signed by the appropriate authorities of Housing Authority or Developer, and all
amendments hereto must be in writing and signed by the appropriate authorities of
Housing Authority and Developer.




                                          -11-
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IN WITNESS WHEREOF, Housing Authority and Developer have signed this
Agreement as of the date first set forth above.


                                     THE HOUSING AUTHORITY OF THE
                                     CITY OF GLENDALE, CALIFORNIA



                                     By:
                                             James E. Starbird
                                             Executive Director

APPROVED AS TO FORM AND LEGALITY:
SCOTT H. HOWARD, CITY ATTORNEY
General Counsel to the Authority


By:
                   Scott H. Howard



KANE, BALLMER & BERKMAN
Special Counsel to the Authority


By:
              Glenn F. Wasserman


                                     GLENDALE HOUSING CORPORATION, a
                                     California corporation



                                     By:                          _
                                             Jim Hudson
                                             Its:




                                      -12-
Gln\ucp\predevelopment loan
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                             EXHIBIT "A"

                         LEGAL DESCRIPTION

LOTS 24, 25, 26, 27, 28, 29 AND 30 OF TRACT NO. 9352, IN THE CITY OF
GLENDALE, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP
RECORDED IN BOOK 125 PAGE(S) 29 AND 30 OF MAPS, IN THE OFFICE OF THE
COUNTY RECORDER OF SAID COUNTY.
    EXHIBIT liB"

PROMISSORY NOTE

[BEHIND THIS PAGE]
                                 PROMISSORY NOTE
                           TO THE HOUSING AUTHORITY OF
                               THE CITY OF GLENDALE


$163,500                                                            Glendale, California
                                                                 _ _ _ _ _ _, 2006

        FOR VALUE RECEIVED, GLENDALE HOUSING CORPORATION, a California
corporation ("Borrower"), having its office at 6430 Independence Avenue, Woodland Hills,
California 91367, hereby promises to pay to the order of THE HOUSING AUTHORITY OF
THE CITY OF GLENDALE, CALIFORNIA ("Housing Authority"), a public corporation, a
principal amount not to exceed ONE HUNDRED SIXTY~THREE THOUSAND FIVE
HUNDRED DOLLARS ($163,500), or so much thereof as may be advanced by the
Housing Authority to Borrower pursuant to that certain Predevelopment Loan Agreement
(the "Agreement") dated as of               , 2006, between Borrower and the Housing
Authority, which is incorporated herein by this reference. The obligation to repay this Note
is a recourse obligation of Borrower, subject to the terms of the Agreement and this Note.
Any capitalized term not otherwise defined in this Note shall have the definition ascribed to
such term in the Agreement.

      1.     This Note evidences the obligation of Borrower to the Housing Authority for
the repayment of funds loaned to Borrower (the "Predevelopment Loan") to assist
Borrower to prepare certain plans and pay other predevelopment costs as provided in the
Agreement.

        2.    Except as provided in this Section 2, the Predevelopment Loan shall bear no
interest. Notwithstanding any provision to the contrary contained in the Agreement or this
Note, any portion of the Predevelopment Loan that is not paid to the Authority when due in
accordance with this Note shall bear interest at the highest rate of interest permitted by
law.

       3.       The Predevelopment Loan shall be due and payable on the date that is nine
months after the execution of the Agreement, if the Housing Authority and Borrower fail to
agree upon a Disposition and Development Agreement CODA") providing for the
disposition, financing, construction and operation of Property, by that date (subject to any
extension of time granted by the Housing Authority). Upon execution of the DDA, the
Predevelopment Loan shall be incorporated into any financing provided for in the DDA.

       4.     If the Predevelopment Loan becomes due and payable as provided in
Section 3 of this Note, the Housing Authority shall consider in good faith any proposal by
Borrower relating to the repayment of the Predevelopment Loan. Provided, however, that
Borrower shall have no obligation to repay the Predevelopment Loan, if the Agreement is
terminated by Borrower as the result of the failure by Authority to negotiate in good faith,
and Authority fails to cure such default after notice as provided in the Agreement.


                                             1
GLN\UCP\Prenote1
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        5.      In addition, the Predevelopment Loan shall be due and payable immediately
if the Authority terminates the Agreement as the result of Borrower's failure to negotiate in
good faith or its failure to satisfy the obligations of the Agreement, and if Borrower fails to
cure such default after notice as provided in the Agreement.

       6.     Payments under this Note are payable in lawful money of the United States
at the principal office of the Housing Authority, 141 North Glendale Avenue, Room 202,
Glendale, California 91206, or at such other place as the Housing Authority may inform
Borrower in writing.

        7.    Borrower waives presentment for payment, demand, protest, and notices of
dishonor and of protest; the benefits of all waivable exemptions; and all defenses and
pleas on the ground of any extension or extensions of the time of payment or of any due
date under this Note, in whole or in part, whether before or after maturity and with or
without notice. Borrower hereby agrees to pay all costs. and expenses, including
reasonable attorney's fees, which may be incurred by the holder hereof in the enforcement
of this Note.

      8.     Borrower shall have the right to prepay without penalty the obligation
evidenced by this Note, or any part thereof, at any time and from time to time.

        9.      At any time, and from time to time, within twenty-one (21) days after notice
of request by Borrower, the Housing Authority shall execute, acknowledge and deliver to
Borrower a statement by a dUly authorized official of Housing Authority certifying that: this
Note is unmodified and in full force and effect, or, if there have been modifications, that it
are in full force and effect as modified, in the manner specified in the statement; and that
Borrower has fulfilled all provisions required to be performed or observed by Borrower as
of the date of the statement, and there are no defaults by Borrower, nor any offsets,
counterclaims or defenses (whether or not asserted or claimed) by Housing Authority (or, if
any are alleged or exist, stating the same specifically). The statement shall include such
other information or certifications reasonably requested by Borrower. Provided, however,
that the Housing Authority shall not be required to make such statement more frequently
than once quarterly.

       10(a) Subject to Force Majeure, and subject to the further provisions of this
Section 10, failure or delay by Borrower to perform any term or provision of this Note or the
Agreement shall constitute a default under thiS Note ("Default"). After receipt of written
notice, Borrower must promptly commence to cure, correct, or remedy such failure or
delay and shall complete such cure, correction or remedy with reasonable diligence, but in
any event within 30 days after notice of default.

       (b)    The Housing Authority shall give written notice of default to Borrower,
specifying the default complained of by the Housing Authority. Delay in giving such notice
shall not constitute a waiver of any default nor shall it change the time of default.



                                              2
GLN\UCP\Prenote1
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       (c)    Any failures or delays by the Housing Authority in asserting any of its rights
and remedies as to any default shall not operate as a waiver of any default or of any such
rights or remedies. Delays by the Housing Authority in asserting any of its rights and
remedies shall not deprive the Housing Authority of its right to institute and maintain any
actions or proceedings which it may deem necessary to protect, assert, or enforce any
such rights or remedies.

        11.     Notwithstanding specific provisions of this Note, non-monetary performance
hereunder shall not be deemed to be in default where delays or defaults are due to war;
insurrection; strikes; lock-outs; riots; floods; earthquakes; fires; casualties; acts of God;
acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of
transportation; governmental restrictions or priority; litigation, including litigation
challenging the .validity of this transaction or any element thereof; unusually severe
weather; inability to secure necessary labor, materials or tools; delays of any contractor,
subcontractor, or suppliers; acts of the other party; acts or failure to act of the Agency or
any other public or governmental agency or entity (except that acts or failure to act of the
Authority shall not excuse performance by the Authority); or any other causes beyond the
control or without the fault of the party claiming an extension of time to perform.
Notwithstanding the foregoing, none of the foregoing events shall constitute a Force
Majeure Event unless and until the party claiming such delay and interference delivers to
the other parties written notice describing the event, its cause, when and how such party
obtained knowledge, the date the event commenced, and the estimated delay resulting
therefrom. Any party claiming a Force Majeure Delay shall deliver such written notice
within fifteen (15) days after it obtains actual knowledge of the event. An extension of time
for any such cause shall be for the period of the enforced delay and shall commence to
run from the time of the commencement of the cause. Times of performance under this
Note may also be extended in writing by the mutual agreement of the Executive Director,
and Borrower.

        12.    If any rights created by this Note shall be held by a court of competent
jurisdiction to be invalid or unenforceable as to any part of the obligations described
herein, the remaining obligations shall be completely performed and paid.

Executed in Glendale, California.

                                          GLENDALE HOUSING CORPORATION, a
                                          California corporation



                                          By:              ~            _
                                                 Jim Hudson
                                                 Its:




                                             3
GLN\UCP\Prenote1
3-16-06
            EXHIBIT   "e"
ASSIGNMENT OF AGREEMENTS. PLANS,
 SPECIFICATIONS AND ENTITLEMENTS

        [BEHIND THIS PAGE]
          ASSIGNMENT OF AGREEMENTS, PLANS, SPECIFICATIONS AND
                            ENTITLEMENTS

FOR VALUE RECEIVED, the undersigned, Glendale Housing Corporation, a
California corporation ("Developer"), pursuant to that certain Predevelopment Loan
Agreement between Developer and the Housing Authority of the City of Glendale
("Authority") dated as of                , 2006 (the "Agreement"), hereby assigns to
the Authority all of Developer's rights and interest, but not its obligations, in, under
and to the plans, drawings, title reports, Phase I Environmental Site Assessments,
Geotechnical Investigation and Geologic Fault investigations, market studies,
permits, entitlem"ents and approvals, if any, described in the Schedule of
Architectural and Engineering Agreements, Plans and Specifications and
Entitlements attached to this Assignment as Exhibit "B".

This ASSIGNMENT OF AGREEMENTS, PLANS AND SPECIFICATIONS AND
ENTITLEMENTS ("Assignment") constitutes a present and absolute assignment to
Authority as the Effective Date. Developer represents and warrants to Authority, as
of the Effective Date, that, to the actual knowledge of Developer: (a) all
Architectural or Engineering Agreements entered into by Developer are in full force
and effect and are enforceable in accordance with their terms and no default, or
event which would constitute a default after notice or the passage of time, or both,
exists with respect to said Architectural or Engineering Agreements; (b) all copies
of the Architectural or Engineering Agreements and Plans and Specifications
delivered to Authority are complete and correct copies; and (c) Developer has not
assigned any of its rights under the Architectural and Engineering Agreements or
with respect to the Plans and Specifications.

This Assignment shall be governed by the laws of the State of California, except to
the extent that Federal laws preempt the laws of the State of California, and
Developer consents to the jurisdiction of any Federal or State Court within the
State of California having proper venue for the filing and maintenance of any action
arising hereunder and agrees that the prevailing party in any such action shall be
entitled, in addition to any other recovery, to reasonable attorney's fees and costs.

This Assignment shall be binding upon and inure to the benefit of the heirs, legal
representatives, assigns, and successors-in·interest of Developer and Authority.

The attached Consent, Schedule 1, Exhibit A and Exhibit B are incorporated by
reference.




                                   ASSIGNMENT
                                   PAGE 1 OF 6
Gln\ucp\assignment of plans
3-16-06
Executed by Developer as of          , 2006.

                                   GLENDALE HOUSING CORPORATION,
                                   a California corporation



                                   By:                _
                                         Jim Hudson
                                         Its:




                              ASSIGNMENT
                              PAGE 2 OF 6
Gln\ucp\assignment of plans
3-16-06
                                    CONSENT

    [TO BE ADDED FOR EACH ARCHITECT, LANDSCAPE ARCHITECT AND
         ENGINEER PREPARING PLANS FOR THE IMPROVEMENTS]


The undersigned Architect/Engineer ("Architect" or "Engineer" as the case may be)
hereby consents to the foregoing Assignment to which this Consent ("Consent") is
part, and acknowledges that there presently exists no unpaid claims due to the
Architect/Engineer except as set forth on Schedule 1 attached hereto, arising out
of the preparation and delivery of the Plans and Specifications to Developer and/or
the performance of the Architect/Engineer's obligations under the Assignment.

Architect/Engineer agrees that if Authority shall become the owner of said Property
and elects to undertake or the construction of the Improvements on any portion of
the Property, in accordance with the Plans and Specifications, and gives
Architect/Engineer written notice of such election; THEN, so long as
Architect/Engineer has received, receives or continues to receive the
compensation called for under the Agreements,' Authority may, at its option, use
and rely on the Plans and Specifications for the purposes for which they were
prepared, and Architect/Engineer will continue to perform its obligations under the
Agreements for the benefit and account of Authority in the same manner as if
performed for the benefit or account of Developer in the absence of the
Assignment.

Architect/Engineer warrants and represents that they have no knowledge of any
prior assignment(s) of any interest in either the Plans and Specifications and/or the
Agreements. Except as otherwise defined herein, the terms used herein shall have
the meanings given them in the Assignment.

                                            ARCHITECT/ENGINEER:


Dated:                        _             By:                             _


                                            Architect/Engineer's Address:




Authority's Address:
Housing Authority of the City of Glendale
141 North Glendale Avenue, Suite 202
Glendale, CA 91206

                                  ASSIGNMENT
                                  PAGE30F6
Gln\ucp\assignment of plans
3-16-06
SCHEDULE 1 TO ASSIGNMENT
SCHEDULE OF UNPAID CLAIMS


Schedule 1          to Assignment of Agreements, Plans and Specifications and
Entitlements        dated as of         -'---_, 2006 between Glendale Housing
Corporation,       as "Developer", and HOUSING AUTHORITY OF THE CITY OF
GLENDALE,          as "Authority".

Unpaid Claims: None




                                   ASSIGNMENT
                                   PAGE 4 OF 6
Gln\ucp\assignment of plans
3-16-06
                                        EXHIBIT A
                                  PROPERTY DESCRIPTION


Exhibit A to Assignment of Agreements, Plans and Specifications and Entitlements
dated as of                      , 2006 between GLENDALE HOUSING
CORPORATION, as "Developer", and HOUSING AUTHORITY OF THE CITY OF
GLENDALE, as "Authority".

                              [LEGAL DESCRIPTION TO BE ADDED]




                                       ASSIGNMENT
                                       PAGE 5 OF 6
Gln\ucp\assignment of plans
3-16-06
                             EXHIBIT B
  LIST OF ARCHITECTURAL OR ENGINEERING AGREEMENTS, PLANS AND
                 SPECIFICATIONS AND ENTITLEMENTS

                              [BEHIND THIS PAGE]




                                ASSIGNMENT
                                PAGE 6 OF 6
Gln\ucp\assignment of plans
3-16-06
       EXHIBIT 3

Resolution of Appropriation

      (to be attched)

				
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